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Motor claim payouts are not behind rocketing car insurance premiums: Michael McGrath

Figures released to the Fianna Fáil finance spokesman show insurance companies paid out more in 2011 and 2012 than in 2014.

Image: Leah Farrell

INSURANCE COMPANIES PAID out more money on claims in 2011 and 2012 than they did in 2014, according to new figures released in the Dáil.

This is despite repeated claims from the industry that the increased number and cost of claims are behind massive insurance premium hikes in the last two years, Fianna Fáil finance spokesman Michael McGrath said today.

McGrath requested information relating to the total amount insurance companies paid out in claims – as reported to the Central Bank – between 2011 and 2015.

In a written response, Finance Minister Michael Noonan said the figures relating to 2015 are still being compiled.

However, the available figures showed insurance companies paid out €1.01 billion in 2014. This is less than the €1.5 billion paid out in 2011 and €1.06 billion paid in 2012. Just over €987 million was paid out in 2013.

McGrath said the figures show the amount paid out in claims in 2014 was 36% less than the amount paid out in 2011.

“While we do not yet have figures for the amount paid out on claims in 2015, the data to the end of 2014 does not substantiate the assertion by the industry that motor insurance claims are the main reason behind rocketing premiums,” he said.

Task force call

McGrath reiterated his call for a task force to be set up to investigate the increase in premiums.

Some customers have seen their car insurance costs jump by up to 60% in the last two years and by a third this year alone.

IncreaseIns of €200 or €300 are not uncommon and younger drivers and those with older vehicles are affected the most.

Escalating premiums are a major financial problem for private motorists and for thousands of businesses across the country, McGrath said.

“Motorists are now typically paying several hundred euro more in their annual premium than they were in 2014,” he said.

We strongly believe that a new task force, along the lines of previously successful Motor Insurance Advisory Board, needs to be established to identify the real reasons why premiums are rising at an unsustainable rate and to make recommendations to deal with the problem.

The Motor Insurance Advisory Board was first established in the 1990s when motor insurance costs rose by 50% over seven years. It helped lower costs by 40%.

Read: ‘His car insurance jumped from €7k to €56k – he’s being forced out of business’

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